Here's our summary of key economic events overnight that affect New Zealand with news the US blockade on the Strait of Hormuz is starting, and a notable feature is that no other country has agreed to join it. Oil prices have risen, along with prices for many other products that rely on trade from the Persian Gulf.
The last tankers to exit the Gulf are now arriving at Asian refineries, so the crunch is ahead of us, and getting closer.
In the US, existing home sales dipped in March as buyers held back on the growing uncertainty. Analysts had expected a dip but this one was slightly larger than anticipated at -3.6%, taking the annual sales rate below 4 mln for the first time since June 2025. It is now also lower on a year-on-year basis. Of course, unsold inventory rose, although not alarmingly.
But there was a larger retreat in building consents in Canada, falling -8.4% in February from January, down -11.5% from a year ago. Most of this was caused by a sharp -24% in non-residential building consents. In fact, housing consents rose +6.4% in the month, led by multi-unit construction.
And there are by-elections in Canada, with most observers seeing Prime Minister Carney in a much stronger position after the votes are counted, no longer leading a minority government.
In China, new yuan loans came in at ¥2.99 tln in March, below the ¥3.36 tln in the same month in 2025, and lower than the ¥3.4 tln forecasted to be their lowest March since 2021.
And a key Chinese rare earth producer has raised its prices +45% for Q2-2026, to a level that is double what it was in Q2-2025. It was their largest quarterly hike since 2023.
India's CPI inflation is rising, continuing a trend that started in November. It was at +3.4% in March, its highest since February 2025. Food prices were up +3.7%. Having noted that, we should also note that a slightly larger rise was anticipated.
Aluminium prices continue to rise, and are now approaching the very unusual peak we saw in February 2022.
And in Australia, we should note that a final court ruling is due any time now on the decades-long dispute over whether Gina Reinhart's claim to the Hancock mining fortune is valid. Could be some fun fireworks ahead.
The UST 10yr yield is now just on 4.30%, down -2 bps from this time yesterday. The key 2-10 yield curve is holding at +52 bps. Their 1-5 curve is little-changed at +23 bps (-1 bp) and the 3 mth-10yr curve is marginally flatter at +65 bps (-2 bps). The China 10 year bond rate is now at 1.81%, down -1 bp. The Japanese 10 year bond yield is up +3 bps at 2.47%, and we make that a 29 year high. The Australian 10 year bond yield starts today at 4.99%, up +2 bps from yesterday. The NZ Government 10 year bond rate up +6 bps at 4.79%.
Wall Street has opened its week firmer with the S&P500 up +0.6%. But European markets were slightly lower, most down by -0.3%. Tokyo fell -0.7% in its Monday trade. Hong Kong was down -0.9%, but Shanghai was up +0.1%. Singapore was down -0.1%. The ASX200 started its week down -0.4. And the NZX50 fell much harder, down -1.2%.
The price of gold will start today down -US$9 at US$4738/oz. Silver is little-changed at US$75.50/oz.
American oil prices are up +US$2.50 at just on US$99/bbl, while the international Brent price is up +US$4, also now at US$99/bbl.
The Kiwi dollar is up +20 bps from yesterday at this time at 58.6 USc. Against the Aussie we are little-changed at 82.7 AUc. Against the euro we are up +20 bps at just on 50 euro cents. That all means our TWI-5 starts today up +20 bps from yesterday at just on 62.1.
The bitcoin price starts today at US$72,231 and up +1.5% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.3%.
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19 Comments
I can’t find any definitive article on it but does anyone know exactly what the rationale is behind the US blockade? Is it to stop the revenue flow into Iran? Is it to force NATO countries into supporting the conflict?
Trump has upgraded his strategic planning by employing an 'ideas stuck to a dart board' technique.
Iran is a gas station masquerading as an Islamic Republic. Much like Russia, its economy runs entirely on energy exports, which pay for everything else.
...Taking Iran’s oil off the market therefore clearly pushes prices up, but that rise is moderate and - with Brent at $110 [$99] - this is increasingly priced. Scenarios where Brent goes to $150 of $200 are in my opinion unrealistic.
https://robinjbrooks.substack.com/p/pros-and-cons-of-an-iran-oil-embargo
Which do you think is longer, Iran's ability to survive without oil and gas revenue, or Trump's attention span?
I'm interested to find out.
I don't think the attention span is the issue, he holds grudges!
While I don't believe attention span is a Trump virtue, his ability to manage the attention span of most of the planet is a natural gift.
So true - he does have everyone else's attention. Unfortunately that is exactly what he wants. Resolve the Iran issue and he'll likely find some other way to grab attention.
Profile, your quote from the link you posted..."Iran is a gas station masquerading as an Islamic Republic."
That's very much how John McCain, described Russia.
McCain's remark didn't age well - this current version probably won't either.
It's exactly the type of hubris and propaganda you would expect to come out of a War$hington "think"-tank ( ie the Brookings Institute), that has to help cheerlead the MIC and, of course, "the best politicians that money can buy" ensconced within the halls of Congress.
Brooks also has previous form with Goldman "Sucks" - the outrageous loan shark TBTF corporation that plies its trade at a global and sovereign level.
Besides, Iran is over 90% self-sufficient in food and agriculture. Western-imposed sanctions (some 1200 over 47 years) that have already been used to try and starve them into submission, likely costing their economy more than $1 trillion to date, and all this has done is strengthen their resolve to protect their sovereignty and civilisation.
Just imagine what the ME could have been like if the West had not spent the last century, or more, trying to steal all of Iran's resources and starve them into submission. The global economy could well have been far more prosperous and peaceful
PM Mosaddegh was couped out of power in 1953 after a reign of a mere two years, and the West has been trying to ruin the Iranian economy ever since.
Short of Israel and/or the US using nukes (I wouldn't put this past either one of them), Iran isn't going anywhere. They are winning this illegal war, and now they have both Russia and China watching their backs.
Meanwhile, the petrodollar is in tatters, and all the RoW would have to do is to sell enough USTs, and the US economy would no longer be able to afford to wage war on half the planet.
https://mearsheimer.substack.com/p/the-trump-blockade-will-fail
... At 13:30...When asked what this current ME debacle means for the Arab states going forward, this was Joshua Landis's reply (Landis is a US academic at the Uni of Oklahoma and is an expert on the ME and Syria)...
"Well, the Arab states are terrified of the instability in the region - they are terrified of two things...
#1 Israeli hegemony.
#2 Because the US seems to be addicted to destabilising the ME.
During the 45 years of the Cold War, America, on average, attacked foreign countries at a rate of about 2.5 times per year. Once the Soviet Union collapsed in 1990, that figure went up to 3.5 - 3.7 times a year. That's an increase of about 50% in the countries that America bombed, attacked, or overturned.
And so you would have to ask yourself... without a peer competitor, and without any challenge to America, why would the US go out and attack countries so frequently? And I think there is only one answer to that... because we could.
And we began to use our military, and teaming up with Israel in the ME, to attack one country after the next. After the end of the Syrian civil war and the overturn of Assad, the Gulf countries and other ME countries were desperately hoping that stability could be returned to the ME.
President Trump has completely upended that, and Israel has too, in attacking Qatar, Iran, Syria, and now Lebanon, taking a big hunk of Lebanese territory.
The Arab countries are trying to figure out... how are we going to stop this?
We (the US) could attack Iraq in 2003, in part because the Soviet Union was dead, and we didn't have to fear them countering us in places like Iraq.
Until there is some fear of this kind of adventurism, of a counter to this behaviour, the US and Israel are going to continue to do what they want in the region, and that comes at a great cost, as we have seen to Saudi Arabia, UAE, and all of the ME powers who right now are paying a very high price for this instability."
The UN was supposed to be the organisation that prevented that 'adventurism', but the great powers have hijacked that to suit their own ends. This is all being driven by greed and lust for power. You can give it various ideological names, but in the end that is all it is about.
Desire for resources - the holding of which IS power.
As we are watching play out
I think it gets China to force the issue at the negotiating table. Pretty sure Iran doesnt have much else in the way of economic output.
Does seem better than a manned invasion on the ground.
Which way will China force it?
China would have been remiss, and unlikely so, to not see this coming and stock up while they could from wherever they could. That would provide two advantages now. Firstly leave the USA floundering and bombing away to greater embarrassment or secondly come to their rescue and enter and find an off ramp for them with resultant international acclaim.
I cant see how they can implement the blockade effectively without coming under Iranian attack. Iran has shown it can hit the Gerald Ford from 900 miles away. A few destroyers in the Gulf Of Oman will be target practice for drones and missiles.
Given all the unpredictability and inconsistencies, it has brought things to the edge of the precipice. For instance should a US Navy warship get heavily hit with high casualties, how then will President Trump react. Would that be seen as a provocation sufficient to justify landing troops even though it would seem there has been little preparation done for the scale that would be required. The whole theatre has been stalled, for the moment, but not the volatility.
They say the carrier wasn't hit but then a fire that lasted 30 hours is strange for an American warship. Fire suppression is usually a top priority in the design of such ships.
Not sure which one you're referencing Zac, but the last carrier fire I read about started in the ships laundry. Access was a significant issue, as was the machinery involved (dryers) which limited the fire suppression systems effectiveness. Fair probability of a maintenance and/or construction issue caused it. Quite a bit of damage caused, but didn't immediately impact the combat readiness of the ship.
Just looked deeper; it was the Gerald Ford, and it burnt for 30 hours, which is no small thing. So it would have had an immediate impact on the ship's readiness. There is a suggestion that it may have been set deliberately by crew upset at extended time on station.
What's behind the roller-coaster of the Fonterra Sharholder Fund, down $2.25 from Friday's $8.40?
Is it simply the distribution of consumer brands on 10 April?
Yep, value of the remaining shares has fallen by roughly the amount paid out. If you held throughout in theory you're no worse off. If you buy in now it's cheaper because you're buying a smaller, less diverse company.
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